Aquino expands cost-cutting plan

President Aquino has set his austerity program in motion, ordering the abolition of task forces and Cabinet-level positions without portfolio, imposing a moratorium on new hires and reducing subsidy to state corporations.

The President wants to develop a lean bureaucracy and cut cost, Budget Secretary Florencio Abad said on Thursday.

Mr. Aquino said he has ordered the Budget department to do away with undersecretaries and assistant secretaries who are without portfolios but draw salaries and enjoy allowances among other benefits.

In a regular department, Abad said there should only be a maximum of four undersecretaries, namely for administration, finance, planning and operations.

As part of belt-tightening, Mr. Aquino already slashed the subsidy and other forms of support for government corporations by 60 percent under the 2011 spending plan.

The subsidy cut will translate into savings of P36 billion from P59.1 billion this year to only P23.3 billion next year.

The cuts will hit “problematic” corporations such as the National Food Authority, Light Rail Transit Authority, and Metro Rail Transit Corp., Abad said.

The cuts in subsidies, equity and share in the tax expenditure fund of GOCCs will help the Aquino administration bring down its proposed budget for next year to P1.645 trillion.

Abad said P8 billion subsidy for the rice procurement of the NFA has been scrapped. “We are proposing that this (P8 billion) be used instead by the Department of Social Welfare and Development for rice subsidies to the poor. We can also reduce the tax subsidies for rice importation given the plan to deregulate rice importation to the private sector and let NFA take care only of buffer stocking and regulation,” the budget chief said.

Abad said Mr. Aquino also approved the deferment of a P4 billion equity due the Central Bank.

Mr. Aquino has also earlier expressed his desire for the LRTA and MRTC to become more viable by increasing fares in the three major mass transportation systems in the metropolis instead of relying on government support.

Also part of the cost-cutting is the deactivation of Quedan and Rural Credit Guarantee Corp. or Quedancor; and the Philippine Crop Insurance Corp., which gives insurance coverage to farmers.

These companies have their own charter and their abolition will require an enabling law.

A number of task forces under the Office of the President will also be dismantled under the austerity program.

Mr. Aquino cited for example the presidential anti-smuggling group and the presidential anti-graft commission.

Abad said programs of the past administration that were “no longer delivering the outcomes intended” will also be terminated.

These include the input subsidies of theDepartment of Agriculture; the Kalayaan Barangay Program that finances development projects in rebel-infested areas; and the Kilos Asenso Program which was designed to provide a 50 percent counterpart funding tolocal government units that would initiate high-impact infrastructure projects in their areas, such as roads, bridges and public hospitals.

Mr. Aquino also approved at least six measures to further bring down the government’s expenditures next year. These measures include freeze hiring of new positions, except those that are population-related such as teachers, uniformed personnel, and medical personnel; keeping 2010 levels for contractual and casual employees; trimming of allowances for GOCCs and government financial institutions; limiting expenses for utilities, communications, and supplies; and moratorium on the construction of newgovernment offices and on the acquisition of motor vehicles. –Joyce Pangco Pañares, Manila Standard Today